The US central bank cut the interest it pays banks for holding cash

The US central bank lowered the interest rate it pays commercial banks for cash they keep at the central bank. This change aims to keep the main overnight lending rate for banks within the central bank's target range.

The US central bank uses the interest rate it pays banks for their reserves as a key tool to manage the economy. When the central bank wants to make borrowing cheaper, it lowers this rate, encouraging banks to lend more. This specific cut is a small adjustment, but it shows the central bank is actively trying to keep the cost of short-term borrowing stable.